Archive for January, 2008

For a word that has its origins in 14th century Anglo-French, “excellence” has done very well. One can hardly ever attend a meeting of top policy makers in business or education or science without somebody or the other raising the question, “Are we striving enough to achieve excellence in our field?” For policy makers, “excellence” is one of those unquestionable goals.

For the cult following that “excellence” enjoys among policy makers we have to thank Tom Peters and Bob Waterman and their 1982 book, “In Search of Excellence.” They were consultants at McKinsey when they wrote this book which went on to sell 3 million copies in the first four years of its existence and is believed to be the most widely held book in libraries in the United States.

Peters and Waterman observed traits thatsuccessful companies had in common. Things like a readiness to take quick action (as opposed to procrastination), a willingness to listen carefully to customers (as opposed to a take-it-or-leave-it attitude), and the discipline to “stick to their knitting” (as opposed to venturing into unrelated businesses).

These ideas seemed so stunningly obviousand something that anybody could practice thatthe notion for striving for excellence quickly became a corner of management thinking. It soon found its way well beyond the business world and into areas like educational and government policy making.It mattered little that in a short few years after the book came outseveral of these “excellent” companies( Atari, Data General, Wang, to name a few) had collapsed financially. The search for excellence marched forward among policy makers.

The idea of searching for excellence has been around in education for a while in an equally unquestioned way.In engineering education, for example, it led to the starting of a half dozen institutions, equipping them with more and better classrooms, more and better teachers and more and better labs and you now have a half-dozen IITs that meet the criteria of“excellence.”

The search for excellence in management education led to the founding if another half dozen institutions , equipping them with more and better classrooms, more and better teachers and more and better libraries and you now have a half-dozen IIMs that meet the criteria of “excellence.”

And this was repeated in medical studies, in Design education, in Architecture and many other fields..

All this is very comforting till you start counting the “others”. The several thousand “other” engineering colleges, the two thousand “other” management schools, the several hundred “other” medical, Design and Architecture schools that have not been favored with these extra resources.

The theory of excellence works on the principle that if in a population of 100, five perform exceedingly well, the job is done. It does not pay attention to the other 95.

Maybe it is time that we set these excellence theories aside and look to the teachings of William Deming, a . philosophy that is exactly the opposite of the excellence theorists’. Up until then achieving manufacturing quality meant posting an inspector at the end of a production process to pick out the excellently produced items and send back the others to be reworked or discarded. Much like how we use tough entrance exams to select 0.5 to 1% of applicants to IITs and IIMs and forget the others.

Deming’s view was that when a production system turns out items of varying quality, we must ask “what is the variation trying to tell us about the process?” There are two parts to this variation he pointed out. The first part isintrinsic to the process.. He called these the “common causes” of variation.And the second part is because of things like an operator falling asleep on his shift or a particularly poor batch of raw material. These he called the “special causes”.

The “special causes”are relatively easy to fixand can often be fixed by the people directly involved in the production process: the worker who operates the machine needs to get a proper night sleep and not fall asleep at the machine, the man who buys the raw material needs to avoid poor batches.

The “common causes”, he said is the more insidious part of the variation of quality. They are often outside the control of workers and others directly involved in the production process and can only be fixed by those in management positions. Perhaps the product design itself is defective, maybe the operating processes are poorly defined, and maybe the working conditions are too poor.

Using Deming’s methods, Japanese auto and electronics companies learned to produce 100% of their output of high quality and with little or no rejects.

When we praise the excellence of our IITs and IIMs and a handful of other elite institutions we may merely be praising the work of pre-Deming quality control inspectors.

This is perfectly in keeping with the origins of the word “excellence.” It originates from the 14th century Anglo-French word “excellere” which means someone or something that is much better than others. Intrinsic to it is the idea of selecting a few and not worrying about the rest.

Is it time we abandoned this search of excellence, embrace the methods of Deming and identify the “common causes” that cause such quality variations in our education system?

The monsoon in Mumbai was winding down and Ganesh Chaturthi had just been celebrated when it struck me that this would be a good time to pay my respects to a man I much admire. So, on a recent bright and clear morning, on my way to work, I stopped by at Chowpatty Beach , that small stretch of sand at the start of Marine Drive that is an island of calm in hectic Mumbai.

It was nearing nine that morning and everyone other a few stragglers had finishedtheir morning exercise walk and gone. The few men and women still lounging around the benches strewn along the edge of the beach were, I guess, folks who had no particular place to go or nothing particularly important to do. On nearby Marine Drive, cars whizzed by in both directions, Mumbaites in their usual demonic hurry to get to work.

What I’d come to see was there alright, if anything taller than I remember- nearly ten feet tall and when you add another ten feet for the pedestal it rested on , it was not easy from nearby to take the whole picture in.

There he stood, Bal Gangadhar Tilak, veteran of many a battle, forever impatient to set his country free now caught in an unhurried pose. One hand clutching a book, perhaps the Bhagwad Gita commentary that he wrote when the British incarcerated him for six long years in a tiny cell in remote jail. The other held a walking stick lightly. One foot was slightly ahead of the other as if he was setting out on a march for one of the many causes he felt so passionate about. He stood there alert as if watching carefully all who entered Chowpatty Beach. On Ganesh Chaturti day, millions pour past his watchful eye to immerse the Ganesh idol into the sea here. And as every school boy in India is taught, it was Tilak who thought up the public version of what was till then a private festival to get around a fearful British colonial government prohibition of large numbers of Indian gathering at one place. Early Ganesh processions even carried pictures of Garibaldithe unfier of Italy.

I wonder whether school children get taught nowadays why Tilak was sent for his first spell in prison. It was nearing the end of the 19th century, Mumbai and Poona were being ravaged by plague which had spread here through merchant ships that traded with Hong Kong. The British colonial administration started forcibly removing plague victims and isolating them in “plague hospitals”. 19th century science knew of no other solution to plague other than isolating people who already got it to prevent the disease from spreading to others. The high-handed way this isolation was done created an outcry among the population. Things came to a head when the British official in charge of this segregation effort was assassinated in Poona. Tilak was implicated, probably falsely, as a conspirator and sent to jail. All this may make Tilak look like an obscurantist who came in the way of medical progress he was far from that. In the middle of this turmoil, his newspapers in Poona were carrying up to date accounts of what Koch, the German scientist, was doing to isolate the plague virus. I wonder whether our school children are taught to make this distinction about Tilak’s actions- the nationalist who objected to the way citizens were being herded into plague hospitals and the modernist who followed eagerly the progress that science was making in finding an answer to the plague problem.

From where I stood beside Tilak I could see that Tilak’s gaze would have taken in the row of glitzy shops that have sprung up across the road on Marine Drive:a Levi jeans shop, a Renault car showroom, one for Arrow shirts, an immensely popular outlet of Café Coffee Day that is packed at all times of the day or night with young trendy, jeans-wearing college students. What would Tilak have made of all this?When he died, in 1920, it was far from clear whether or when India would wrest Independence and Tilak till his end was uncompromising in his demand for Swaraj. But he was also the man who in 1880 had co-founded an English medium school in Pune, “The New English School”, and an English language newspaper, “The Maratha” .

For that matter what would Tilak have made of what some environmentalists say- that the immensely popular Ganesh festivities that culminate in thousands of Ganesh statues being immersed in the sea cause environmental damage. The Ganesh statues were, in Tilak’s time, made of harmless clay andpainted over with vegetable dyes, but present-day versions are made of plaster of paris that, environmentalists say, contains gypsum, sulphur, phosphorus and magnesium and are painted over with chemical paints that contain mercury, cadmium, lead and carbon.

Tilak, ever the modernist, would probably have led another movement, this time at the head of the environmentalists who suggest that permanent idols made of brass or stone be used, that a symbolic immersion be done so that the same idol could be used again the next year and oppose the use of thermocole and plastic in decorations. And, ever the great activist, he may have carefully watched the immersions from his vantage point at Chowpatty to make sure that these socially important directions are followed.

It is early January here in New York and the weather had no right to be as warm and sunny as it is today. By any account it has to be freezing and below zero Celsius and the streets have to be speckled with dirty, melting snow puddles. These pigeons that we see hopping along in the square ought to be hiding from the cold in a warm nook of some building. The streets are bustling with people. This is not a sight for early January. People ought to be indoor and the streets ought to wear the deserted Januarylook.

I find myself strolling back from lunch with a prominent technology guru of a prominent Wall Street bank.

“I have finally figured out what ‘one lac’ means,” he had said to me.

“How come?”I asked, genuinely surprised. There have many things I have tried explaining about India to our western friends, but not our numerical system of ‘lacs’ and ‘crores’. I thought we had left that safely behind in favour of ‘hundreds of thousands’ and ‘millions’. The term ‘lac’ had seemed so archaic. But here it was, back in the world’s headlines with the ‘Rupees One Lac car” from the Tatas.

“I believe what the Tata’s are unveiling today, their Rs one lac car, is going to change the way the world looks at Indian companies,” my tech guru friend had said.

“When the Indian software industry, made its mark,” he had continued, “the rest of the world had understood how they did it; Indian programmers were a tenth as expensive as programmers in the West. Then the Indian rupee steeply devalued from Rs 8 per dollar in the mid-1980’s to Rs 45+ per dollar in the mid 1990’s making the cost competitiveness case even more compelling. But the Rs 1 lac car is different. They will get to this target not by using cheaper labour or cheaper materials available only in India. They are going to get to this by bringing into play product design skills, consumer insights, management systems, perhaps even a new business design. In other words, they are going to compete on capabilities not resources. That’s why it is sending a shudder down the spine of many Western executives, not just car industry executives.”

As I walked back to my office my mind strayed to other such moments in industrial history.

Take, for instance, Richard Arkwright’s successful effort in the early part of the 19th century to make machines spin yarn of a quality equal to or better than that spun by skilled, hand spinners in India. His innovation made yarn cheaper and thus made cotton cloth woven from it affordable not merely by the very wealthy and it had been till then. What Arkwright did was not save labor costs by using machines instead of labour because any such savings were more than offset by the cost of equipment and factory buildings… His real innovation was in the design of work such that workers would all congregate at a fixed place of work (a “factory”) and thus work for predictable hours and under tight supervision as opposed to working odd hours at home. Superior work organization allowed output to be dramatically increased and made cotton yarn widely available, a feat that home-based spinners could not achieve.The rise of the Western world was predicated first on this idea- the use machines to do at one central place what hitherto human muscle power had done in decentralized home based activity. Then came the use of chemistry to make synthetically and in plenty materials that had been hitherto available in nature in restricted quantities and in varying quality levels and consequentially at higher prices. Thus indigo from India was synthetically produced and became available in vast quantities and at a fraction of the price of natural indigo; aspirin, hitherto distilled from the bark of willow, was similarly synthesized and millions of ordinary citizens benefited.

Henry Ford created another revolution when he launched his Model T car and brought cars within the reach of ordinary people. He did this by deploying “mass production” techniques- a new system of arranging a sequence of metal working machine which did repetitive operations reliably and which could be supervised by the illiterate, unskilled immigrant labor coming off the impoverished farms of Ireland and Southern Italy- the only kind of labour available to him at that time. Ford’s “big idea’, mass production, then got deployed in a wide variety of metal working industries and made such objects like the sewing machine and bicycles affordable by all.

The “big idea” behind the Rs 1 Lac Tata car is this- an Indian company, has dreamt up a management system and a business design to build cars that are affordable by people who had never dared dreamof owning a car..

The real message of the Rs 1 Lac car is that in one stroke, it is showing the way to Indian managements that a new era awaits- one where you compete on superior management capability leaving behind decades of attempting to compete on cheaper labour or cheaper natural resources.